One World Two Systems – Working Together

I have written before on this theme. My view was that China would emerge with a new regional system.

The world has been organised around an American led system for the last 60 years that is characterised by American dominance, the IMF, the World Bank, Nato and the United Nations. But they were the chief source of funds and the militarily dominant power, so it was hardly surprising.

So what is the new system that China would develop and secondly is it in conflict with the existing U.S.A. led system?

1.The Chinese led, Asian based, new system is becoming clearer.

It is a plan to build a landbridge from East China through Central and South and South East Asia across to Europe, Africa and the Middle East. It also includes a new sea route which circumvents the Malacca Straits and rebuilds many port cities which have fallen into lack of use and investment.

The new system is globally transformative and opens up new areas of the globe and enables most of the globe to reach each other by land.

The first stage is to open up East Asia to Europe and Africa and the Middle East by modern versions of the old Silk Roads – by land and sea.

It is firstly a major new transportation route, an addition to the sea routes which have been the basis of for global trade for 400 years. The high speed trains and new highways will open up vast areas of the globe.

It is a new transportation route which opens up vast areas of land with mainly low population densities, which gives the prospect of huge new towns and cities across these vast areas of Central Asia.

That provides for major new global demand and growth of economies of 60 nations. It will probably take 20-30 years, or more, to develop, maybe longer.

This is to be funded by new banks – AIIB, BRICS Bank and presumably a SCO Bank, and a Silk Road fund.

This links with the Chiang Mai Accords and other regional features such as the Asean Free Trade Area and other Asian Trade areas that are under discussion.

The development of the EU and Nafta, and other continental organisations, show that Asia is likely to develop a continental approach and China is anticipating and supporting that.

The decision of Western nations to join the AIIB – Chinese share 51pc –shows how much they are aware of the Asian growth potential. China’s positive response shows that this regional development is not aimed to keep the West out.

2. Do the two systems explode into conflict? Does one absorb the other? Or do they exist separately and join where there is win win?

It works if it is the last of these.

China must drive the Asian development. No other country has the various resources that are necessary to make this happen. They have the funding core, the planning capability and the basic infrastructure capability. The U.S.A., the World Bank, the IMF and the Asian Development Bank will not build a new Asian Infrastructure and promote major growth as a byproduct.

But for the U.S.A. and the West to participate there must be real and big benefits for the West. The Chinese know this and will enable this. They know the West brings key technologies, funds and brands, and entrepreneurs and tourism.

3. The 20th century saw a head on collision between rising powers and existing powers. 100 million died.

The 21st century can learn from the 20th and build connections between the two systems so that all can win.

We live on the edge of the most exciting times in the world.

We are shaping the 22nd century now.

A huge land mass connected by highways and high speed trains, where planes fly but local traffic of up to 1000 km is by trains and road. Freight moves by land, sea and air. Huge areas of the world become more densely populated. Sustainable growth is a real possibility.

The Chinese have shown a long term plan for global development. To take an old saying:

Go West young man, from China

See the following article which is a good analysis of the political issues:
http://www.telegraph.co.uk/finance/economics/11495638/US-risks-epic-blunder-by-treating-China-as-an-economic-enemy.html

See the following important position paper released by China 29th March 2013
http://www.china-embassy.org/eng/zgyw/t1249618.htm

Wish you a pleasant Easter break

Stephen



Categories: Corporate

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1 reply

  1. Great article, Stephen. I quite agree: the way ahead for both China and the West is not in clashing heads but rather in balancing/counter-balancing each other. You might like this post on that subject: https://www.linkedin.com/pulse/ping-tim-f-nash

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